Make no mistake. They're going to make an example of Ripple. This is going to be horrible for them and a warning to anyone trying to run a similar Ponzi scheme. You can't centralise, hype and then cash out on vaporware without there being consequences. XRP held zero value at the time the founder cashed out and they've been trying to make their consulting business work ever since. Dare I say XRP goes to zero. Watch this space.
Cryptocurrency company Ripple says SEC lawsuit is imminent
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Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#62Earlier quoted context omitted.
“Proof of authority” chains are a lot more than just a database. There is still a verifiable audit trail etc.
Nothing stops you from having a verifiable audit trail in a SQL database. You could even decentralize the audit trail. Problem with Ripple is creation of new XRPs, they had full control over that.
How do you decentralize the audit trail? Would need something like ripple
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#63What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when…
> What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when the post was first created).
So the thing is, isn't this kind of system (very similar to a concept I can only remember as Hawala[0]) explicitly illegal?
> Hawala or hewala (Arabic: حِوالة ḥawāla, meaning transfer or sometimes trust), also known as havaleh in Persian,[1] and xawala or xawilaad[2] in Somali, is a popular and informal value transfer system based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as hawaladars). While hawaladars are spread throughout the world, they are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. Hawala follows Islamic traditions but its use is not limited to Muslims.[3]
> Some government officials[which?] assert that hawala can be used to facilitate money laundering, avoid taxation, and move wealth anonymously.[citation needed] As a result, it is illegal in some U.S. states, India, Pakistan,[14] and some other countries.[citation needed]
The whole IOU system doesn't need crypto to work -- but you just can't set up the kind of clearing house/federation that you'd need in the US because it's illegal, I thought.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#64One more proof that Ripple, being centralized, was bound to fail from day one and never was a match for Bitcoin (and all its more or less retarded cousins).
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#65What are the implications here for the Stellar project and Stellar Lumens? They seem like an awfully similar use case.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#66What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP when…
> What I've never understood about XRP and Ripple is that originally XRP was meant to only be used for paying for transactions and the ledger was meant to track IOUs between people denominated in some other "real" currency. They had videos floating around explaining the concept. In fact, they were handing out XRP for free to bootstrap the network of users [0] (that post says 1000 XRP, originally it was 30,000 XRP whe…
Ripple (old-school Ripple, not XRP) doesn't need any clearing house or federation. It's just you, me, and the hops along the way interacting long enough to facilitate the transaction.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#67What are the implications here for the Stellar project and Stellar Lumens? They seem like an awfully similar use case.
All altcoins have similar use cases. For the SEC, it's not the use case, it's about whether coins were sold in ICO-like deals. Stellar didn't promote any ICOs. Coins like Ethereum are way more at risk to be the target of SEC investigations.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#68What are the implications here for the Stellar project and Stellar Lumens? They seem like an awfully similar use case.
You are correct.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#69Earlier quoted context omitted.
If it thought there were grounds to do so, the SEC could take on the major BTC exchanges. Losing a means to convert to/from fiat currencies would drive away the vast majority of BTC traders, and possibly cause something of a bank run upon the announcement of SEC action against them. I mean, let's be real here, the vast majority of BTC transactions aren't for goods or services.
SEC deals with securities, bitcoin is not a security according to them. Ripple(XRP) is.
Until they are. Mining equipment for BTC is already effectively monopolized by one vendor and they are likely doing significant mining behind the scenes controlling much of the market.
Re: Cryptocurrency company Ripple says SEC lawsuit is imminent
#70I don't understand why this hasn't happen sooner as it's been 8 years since their release. Ripple is a centralized, managed network. It's nothing like Bitcoin, Ethereum, or many other decentralized projects. Ripple is not a cryptocurrency. For years I've told loved ones, friends, and anyone with a passing interest in the nascent space to avoid Ripple like the plague.
You are missing the point, the SEC is not after Ripple because of centralization. They are going to sue Ripple because of the ICO.
So in this case, Ethereum will probably also be categorized as securities because it sold pre-mined coins on their launch.